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A Lump of Coal for ANCs

ICTMN Staff

12/27/10

In a year filled with congressional triumphs for Indians, Sen. Claire McCaskill, D-Mo., delivered a lump of coal to tribal businesses, especially Alaska Native Corporations, in the waning months of 2010.

In the fall, the senator introduced legislation that would remove a benefit that allows ANCs to secure non-competitive contracts of unlimited size. It would also impact tribal businesses outside of Alaska that take advantage of the Small Business Administration’s 8(a) program, which was meant to give them an edge in a crowded field.

ANCs were created by a 1971 law that aimed to encourage economic development in Alaska, and in 1986, Congress made ANCs eligible to participate in the Small Business Administration’s 8(a) program.

McCaskill’s renewed crackdown came soon after the Washington Post published a lengthy investigative series into alleged mismanagement and shady dealings involving contracts to ANCs. It found some questionable practices, including lacking Native representation in some of the organizations’ business dealings. The articles also reported that the ANCs passed work on to traditional, large defense contractors while non-Native ANC executives earned millions of taxpayer dollars.

Some tribal citizens and ANC shareholders were supportive of the Post’s reporting, while others have said they painted an incomplete picture.

“Even though the Post sent someone out here, I think it’s still frustrating that the real facts and story behind what we’re doing didn’t come out very well,” Will Anderson Jr., president of the Alaska Native Claims Settlement Act Regional Association, told a gathering of business leaders in the state.

“We’re criticized for being fronts for big business, but I think everyone in the room knows that we are successful, and sophisticated and professional organizations that are very capable of doing our own work,” added the president and CEO of Koniag Inc.

The Native American Contractors Association has also said the reporting and follow-ups by other publications have been one-sided, failing to point out the benefits the program has provided to Alaska Natives.

The most widely reported provision of McCaskill’s bill is that it would require ANCs, like most other 8(a) minority participants, to be limited to sole-source contracts valued at no more than $3.5 million for services or $5.5 million for goods.

Various ANC leaders and lobbyists have decried the senator’s attention, saying she doesn’t understand what she is doing to tribal businesses as a whole.

Alaska legislators have also lambasted McCaskill’s moves, with Sens. Lisa Murkowski, R-Alaska, and Mark Begich, D-Alaska, teaming up across party lines to combat the legislation. Murkowski received attention in the fall for receiving strong support from Alaska Natives in her close re-election bid.

McCaskill has vowed to continue moving forward, having made good on that promise since summer 2009 when she began investigating ANCs as chairperson of the Subcommittee on Contracting Oversight. As part of the investigation, the subcommittee released two reports that found that ANC contractors failed to employ Alaska Natives to work on the contracts and returned minimal benefits from the businesses to Alaska Natives.

“We’ve seen that a very small portion of these companies’ profits are reaching native Alaskans, so it’s time to acknowledge the fact that this program is not effective for either native Alaskans or taxpayers,” McCaskill said, adding that her aim is to “return ANCs to equal footing with other small, disadvantaged businesses seeking government contracts.”

Maria Speiser, a spokeswoman for McCaskill, told Indian Country Today in the fall that the senator thinks the federal government has a role to play in helping Native Americans economically, but she believes that the government should find a way that is more effective in reaching that goal.

Speiser said, too, that the senator had not received a lot of feedback from Missourians, Native Americans or otherwise, about this particular issue.

Federal reports indicated that ANCs received $5.7 billion in contracts through the 8(a) program in 2009 alone, which is more than 20 percent of the value of contracts for all minority firms in the program. There are about 200 ANC-affiliated companies compared with 8,100 other businesses in the program.

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